Post on 26-Dec-2021
GOVERNMENT-WIDE CATEGORY MANAGEMENT PMO
Government-wide Category Management Key Performance
Indicators Definitions and Guidance
V2.0 July 13, 2018
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1 Introduction .................................................................................................................................................................... 3
2 Scope ............................................................................................................................................................................... 4
3 Principles ......................................................................................................................................................................... 5
4 Key Performance Indicators ............................................................................................................................................ 5
5 Roles and Responsibilities ............................................................................................................................................... 6
6 Spend Under Management ............................................................................................................................................. 9
6.1 Baselines and Goals................................................................................................................................................. 9
6.2 Data Source and Reporting ..................................................................................................................................... 9
6.3 Ensuring Accuracy ................................................................................................................................................. 11
7 Best-in-Class Obligations Against Addressable Market ................................................................................................ 11
7.1 Baselines and Goals............................................................................................................................................... 11
7.2 Data Source and Reporting ................................................................................................................................... 11
8 Cost Avoidance .............................................................................................................................................................. 12
8.1 Baselines and Goals............................................................................................................................................... 12
8.2 Requirements for Applying Cost-Avoidance Methodologies ................................................................................ 12
8.3 Accepted Types of Cost Avoidance Assessment Methodologies .......................................................................... 13
8.4 Cost-Avoidance-Assessment Methodologies Management ................................................................................. 17
8.5 Data Input and Reporting...................................................................................................................................... 18
9 Tier 0 Contract Reduction ............................................................................................................................................. 18
9.1 Baselines and Goals............................................................................................................................................... 19
9.2 Data Source and Reporting ................................................................................................................................... 19
10 Small-Business Utilization ......................................................................................................................................... 20
10.1 Baselines and Goals............................................................................................................................................... 20
10.2 Data Source and Reporting ................................................................................................................................... 20
11 Category Management Training ............................................................................................................................... 21
11.1 Baselines and Goals............................................................................................................................................... 21
11.2 Data Source and Reporting ................................................................................................................................... 21
Appendix A: Document Change Control Tracking ............................................................................................................. 22
Appendix B: Executive Approval of Versions ..................................................................................................................... 23
Appendix C: Data Sources ................................................................................................................................................. 24
Appendix D: SUM/BIC Data Sources .................................................................................................................................. 25
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Master Contract Inventory................................................................................................................................................ 25
IDV Table ........................................................................................................................................................................... 25
Tier Logic ........................................................................................................................................................................... 26
Appendix E: Travel Cost Avoidance Calculations - ERRC ................................................................................................... 27
Travel Cost Avoidance Assessment Example .................................................................................................................... 27
Appendix F: BIC Data Elements ......................................................................................................................................... 31
Required Data FPDS Solution ............................................................................................................................................ 31
Required Data Non-FPDS .................................................................................................................................................. 32
BIC Prices-Paid Data Fields ................................................................................................................................................ 33
Appendix G: Cost-Avoidance-Confidence Matrix .............................................................................................................. 34
Appendix H: SUM Maturity Matrix .................................................................................................................................... 35
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1 Introduction The U.S. Federal Government is the world’s largest buyer, spending over $300 billion annually on common good and services. These procurements are made by over 500 separate federal departments and agencies leading to inefficient buying patterns, unnecessary duplicative contracting actions increasing administrative costs, and significant variance in pricing for the same goods and services. Category management aims to help executive branch agencies make more informed purchasing decisions through collaboration and shared business analytics. This will better equip executive branch agencies to buy common goods and services using a combination of government-wide, agency and local contracts that are best suited for the need. Category management will allow agencies to leverage the government’s large purchasing power to buy common goods and services more like an enterprise to eliminate redundancies, increase efficiency, and deliver more value to taxpayers.
The Government-Wide Category Management Program (GWCM) has defined 10 common categories of goods and
services. These categories are Facilities and Construction, Professional Services, Information Technology, Medical,
Transportation and Logistics Services, Industrial Products and Services, Security and Protection, Human Capital, Office
Management and Travel. The Category Management Leadership Council (CMLC) is the governing body for category
management with each category having a category manager -- experts in their respective fields, responsible for
developing category strategies and acting as change agents. These categories have supporting category teams with
representatives from various federal agencies and are coordinated by the GWCM Program Management Office (PMO),
which provides overall program management support to these groups and individuals in the governance structure and
facilitates the development and implementation of business rules and processes.
The CAP Goal Action Plan has defined a series of cross agency priority goals to meet the objectives laid out by the
President’s Management Agenda:
CAP Goal Metric FY 2016 Baseline
FY 2017 Actuals
FY 2018 Goal
FY 2019 Goal
FY 2020 Goal
Cumulative cost avoidance $5.8B $13.5B $15B $17B $18B
Cumulative percent of common spend that is under management, aligned to category management principles 44% 42% 50% 55% 60%
Cumulative percent of addressable spend through Best In Class solutions 10% 24% 35% 37% 40%
Cumulative percent reduction number in unique contracts 425k -3% -10% -12% -13%
Meet or exceed category management small businesses goals * 30% 30% 30% 30% 30%
Number of individuals trained on category management 0 776 1,110 1,365 1,540
* The government-wide socioeconomic prime contracting goals are: SDB @ 5.0%, WOSB @ 5.0%, SDVOSB @ 3.0%, and HUBZone @ 3.0%.
These goals will be achieved by the collective work of the category management teams in setting strategic plans and
initiatives, and by agencies in managing their procurements and spending accordingly. By the end of FY 2020, the
government will achieve $18 billion in cost avoidance for taxpayers by applying category management principles—or
smart decision-making where agencies buy the same kinds of goods and services through best value contract solutions—
to 60% of common spend. In addition, the government will reduce duplicative contracts by 50,000, potentially reducing
administrative costs by hundreds of millions of dollars.
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2 Scope The purpose of this document is to formalize and fully define the key performance indicators (KPIs) that will be used to
measure success for the GWCM program. These KPIs have been specifically developed to meet the CAP Goals set by the
President’s Management Agenda and will be measured within each fiscal year beginning in 2018. The specific targets for
each KPI have been developed from a Fiscal Year 2016 baseline and deemed attainable from previous performance and
trends.
The KPIs detailed in this document will be communicated in monthly reports, using online tools and dashboards created
by the PMO to allow ongoing monitoring and reporting of data. These reports and dashboards will provide agencies with
actionable intelligence and insights into their procurements and buying behaviors to allow them to make the necessary
adjustments to improve performance. The PMA goals outlined above may be adjusted accordingly in line with the
program performance as measured by these KPIs.
As the single authoritative repository for federal procurement award data, the Federal Procurement Data System (FPDS)
will be the primary data source for these KPIs. As such, it is imperative that contracting officers are inputting timely and
accurate information into the system so the data for the GWCM program is reliable. These KPIs have been formalized
and established; however, can evolve to account for new initiatives, better data availability, more precise
measurements, etc. As such, this is a living document subject to periodic version updates.
The six KPIs in this document will apply to the 10 common-spend categories and be measured government-wide across
executive branch agencies. The baselines and goals laid out are for the GWCM program as a whole, while individual
categories and agencies have specific objectives and targets laid out in their category plans that are outside the scope of
this document. Defense-centric categories, internal category or agency KPIs, and other targets such as agency small
business goals determined by the SBA are not addressed by these KPIs.
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3 Principles Defining and tracking KPIs for a complex program and across many organizations is challenging, and requires all
participants to deliver to both the detailed guidance and the principles outlined. Where applicable, program
stakeholders (category managers, the PMO, OMB, etc.) can make recommendations for improvement as the program
develops over time. The aim of the program-level KPIs is to demonstrate fundamental improvements across Federal
government, to demonstrate trends and the absolute impacts resulting from initiatives, and to track impacts over time.
The key principles built into this guidance document are:
Methods of recording and reporting results are evidence-based;
KPIs are measured and reported at both program and category level;
Guidance and reporting is transparent and auditable;
Baselines and benchmarks are robust and realistic;
Reported impacts are a direct result of category management activities (e.g., sourcing, demand management,
contract and supplier management); and,
Defining, maintaining, and reporting KPIs requires a coordinated approach across agencies, the category teams,
the PMO, OMB, and the CMLC.
4 Key Performance Indicators The KPIs were selected because of their alignment to program priorities, and because the reporting of those KPIs can be
used to refine and improve category initiatives. Currently, there are six KPIs for government-wide category
management. They are defined briefly below, and in greater detail in subsequent dedicated sections:
Spend Under Management (SUM): the total dollar amount of obligations through contracts that are actively
managed in compliance with the SUM contract tiered maturity model
Best in Class Obligations Against Addressable Market: the total dollar amount of obligations tracked via FPDS
through BIC solutions
Cost Avoidance: demonstrates the extent to which the program is delivering increased value for the goods and
services acquired by agencies, measured in dollars
Tier 0 Contract Reduction: demonstrates the extent to which the program is reducing the number of Tier 0
(“open market”) contracts, defined as those contracts not aligned to category management principles
Small Business Utilization: demonstrates the extent to which the program maintains or increases government
use of small businesses (measured as a percentage) while implementing category management strategies
Category Management Training: tracks the number of individuals trained in the aspects and components of
category management
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5 Roles and Responsibilities
Entity Strategic Roles / Responsibilities Operational Roles and Responsibilities
Executive Branch Agencies
Devise strategies for moving spend from Tier 0 to SUM-aligned or BIC contracts
Identify possible areas of training focus for future courses
Prepare business case and submit through OMB Max. Include analysis of alternatives for contracts over $50M with scope overlap to existing vehicles
Review contract inventory for accuracy and work to resolve any identified issues
Enter small business and acquisition information into FPDS accurately and promptly
Use dashboards to identify Tier 0 and expiring contracts for target-setting
Review reported contract counts
Send agency representatives to GWCM training events and ensure survey participation
Align new contracts to the BIC criteria whenever possible (Or use BIC whenever possible)
Senior Accountable Officials (SAO)
Ensure category management processes and policies are in place at their agency
Set agency targets for SUM and spend through Best in Class solutions and ensure their agency meets these targets
Establish a plan yearly with their Chief Acquisition Officer (CAO) and Senior Procurement Executive (SPE) to outline how the agency will reduce unmanaged spend and increase use of Best in Class solutions
Review SUM dashboard and update OMB senior leadership semi-annually on their agency’s efforts to bring more spend under management
Liaise and coordinate with agency and Government-wide category managers
Review their agency’s Spend Under Management (SUM) and related metrics that reflect the agency’s use of smart buying practices
BIC Solution Owners Develop solution-specific methodologies for cost avoidance
Identify and/or assist in identifying category/ solution SMEs for solution review
Provide transactional and cost avoidance data to the GWCM PMO via a secure file transfer portal.
Provide necessary information for the BIC designation process
Provide inputs to the BIC quarterly and annual solution reviews
GWCM PMO Manage KPI definitions, evidence and measurement requirements
Ensure reporting standards are applied consistently
Evaluate and propose improvements to capturing and reporting data for KPIs
Generate and provide quality assurance (QA) on monthly KPI reports
Complete quarterly reviews of approved cost-avoidance reporting methods and provide amended or additional guidance and examples as required
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Entity Strategic Roles / Responsibilities Operational Roles and Responsibilities
Manage and coordinate any external audit of the KPIs, if required
Establish program-level reporting and a standardized approach to category-level reporting
Review and make recommendation to OMB on proposed cost-avoidance calculation methods
Provide preliminary approval to KPI and reporting approach and changes
Document all KPIs and ensure they are version-controlled and updated when changes are made
Manage a repository of all methodologies and definitions for program level KPIs, including cost-avoidance methodologies reported by category teams
Maintain and update a contract inventory of all government contracts aligned to the SUM maturity matrix
Manage a repository of evidence / management information that supports each month’s KPI reporting to ensure that there is an audit trail of all KPI reporting
Develop and issue monthly KPI reports including progress of the major initiatives and KPI tracking
Issue a program monthly report to key stakeholders / stakeholder groups
Category Team PMs Develop cost-avoidance initiatives and associated targets with BIC solution owners and PMO
Coordinate any category-specific initiatives
Review monthly reports, resolve any issues and add qualitative input
Use KPI reporting data to monitor and identify changes to existing initiatives
Provide recommendations to category managers about any category elements that require attention or about potential new opportunities
Category Managers Ensure that all KPI approaches and calculations are compliant with the program-level definitions and guidance
Recommend new KPIs or changes to the existing KPI definitions and guidance
Identify candidate solutions for BIC designation
Manage the category leadership review of the Best-in-Class package from the solution manager
Adjudicate the requests from agencies to stand up new contract vehicles that are duplicative in scope (i.e. following
Approve the relevant category data included within the monthly reports
Use KPI reporting data to monitor progress and identify any changes to existing initiatives
Report, via category PMs, category progress and initiative delivery
Lead the review and analysis of the proposed changes to PSCs within a specific category,
Document the PSC analysis, recommend changes, and state the rationale for recommendations,
Provide final changes (numbering,
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Entity Strategic Roles / Responsibilities Operational Roles and Responsibilities the mandatory for use or consideration policy)
definition, and naming) to PSCs,
Notify stakeholders of PSC changes and update the PCE and other stakeholders on the proposed changes, especially issues related to the collection, use, dissemination, and display of procurement data.
Office of Management and Budget (OMB)
Approve cost-avoidance calculation methods
Approve KPI changes (scope or reporting)
Provide notice to CMLC of KPI changes
Manage the business case process through OMB Max
Establish government-wide and agency-level performance goals, and report performance against these goals
Provide enterprise-level performance reporting to external stakeholders (e.g., Congress, White House, etc.)
Review additional SUM contracts not currently captured in contract inventory
Issue any updates to CAP goals based on data and program performance
Provide final approval for BIC designation
CMLC Review approaches to measuring and reporting performance and provide feedback
Review and approve/disapprove KPI changes and supporting methodology
Work with OMB to establish KPI goals specific to their agencies and drive attainment of those goals at the agency level
Engage with agencies on their planning and achievement of KPI goals
Table 1 KPI Roles and Responsibilities
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6 Spend Under Management Bringing spend under management is a priority of the GWCM program. Generally speaking, spend under management
(SUM) is the amount of an organization’s spend that is actively managed according to category management
principles—or smart decision-making where agencies buy the same kinds of goods and services through best value
solutions. Increasing SUM will eliminate redundancies, increase efficiency, and deliver more value. Within the context of
the GWCM initiative, OMB defines SUM as spend on contracts that demonstrate defined attributes for management and
data-sharing maturity. The following tier ratings are used to annotate contracts and assess agency spend through those
contracts:
Tier Rating
Contract Type Agency Spend Assessment
Tier 3 Best-in-Class (BIC)
Solutions Spend Under Management
FPDS obligations transacted through contracts that meet defined criteria for Tiers
1-3 is deemed “under management.”
Tier 2 Multi-Agency Solutions
Tier 1 Mandatory-Use Agency-
Wide Solutions
Tier 0 All other contracts
Spend NOT Aligned to Category Management Principles
Spend on contracts that are not aligned to category management principles is
rated Tier 0 as it represents opportunities for adopting higher-tier solutions. Table 2 SUM Tiers
With the exception of Tier 3 ratings—which are reserved for BIC vehicles—solution owners assign tier ratings to their
respective contracts based on attribute standards detailed in the Appendix H: SUM Maturity Matrix . A vehicle must
meet all five attribute standards to qualify for a Tier 1 or 2 rating. For example, if a vehicle meets Tier 2 requirements for
Leadership, Strategy, Metrics, and Tools, but not does meet Tier 2 Data attribute requirements, it would be rated Tier 1.
Overall tier ratings are input into a master Contract Inventory which assigns that tier to contract obligations tracked via
FPDS. The contract inventory also tracks parent-to-child relationships between vehicles, such as a BPA on a Multiple
Award Schedule. This inventory is not static and allows input of new contract vehicles and is adjusting to the current
state of contract solutions, updating constantly. SUM will be consistently changing, along with FPDS and any
improvements to the contract inventory.
6.1 Baselines and Goals In 2016, OMB asked agencies to identify and provide information on well-managed contracts. This data request served
as the basis to build the contract inventory which when completed with additional agency feedback, became the FY16
baseline for SUM of $115.8B. The President’s Management Council provided CFO ACT agencies with specific dollar goals
for increasing SUM by 20%, based on their FY16 baseline. The President’s Management Agenda has set the goal to bring
half of overall GWCM spend to be under management by the end of FY18
6.2 Data Source and Reporting Spend under management is primarily sourced from FPDS information, augmented by SUM tier information from the
contract inventory, which is detailed more in depth below. The complete contract inventory with SUM tier ratings is
updated on an ongoing basis and the data is reported on the web-based FPDS Spend and SUM Analysis Dashboard. The
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contract inventory and dashboards will reduce the burden to agencies and enable ongoing monitoring and reporting. A
detailed contract inventory example can be found in Appendix D.
The main components for tracking SUM are:
6.2.1 Contract Inventory
The master contract inventory is maintained by the PMO data team, and contains the FPDS contract information
provided by agencies for contracting vehicles they have reviewed and designated as ‘under management’. This inventory
is based upon previous OMB requests for well-managed vehicles and contains necessary details for SUM contracts like
master contract names, managing agencies, and the agency-designated SUM maturity tier. The contract inventory also
contains necessary FPDS tracking information, such as unique Procurement Instrument Identifiers (PIID) and master
contract PIIDs for linking back to such vehicles as Multiple Award Schedules (MAS). The contract inventory is the basis
for both SUM and BIC obligations and serves as a resource for categories, agencies, solution owners, and other internal
General Services Administration (GSA) teams. The Contract Inventory Exploration Tool has been created to let categories
and agencies explore the current information.
6.2.2 IDV Table
The Indefinite Delivery Vehicle (IDV) table has been created to capture relationships and hierarchies between IDVs and
awards. This fills gaps where agencies did not report connections from awards to schedules, either in submissions to the
contract inventory or in their FPDS entry in the IDV field. Building the IDV table required capturing FPDS data on IDVs
and tying them together based on piid and reference_piid numbers of IDVs. This table was then joined with the existing
GWCM table, which previously only captured award entries, on the reference_piid of the awards.
It is important to note that different award types have different IDV lineages. For instance, a BPA call is an award based
off a blanket purchase agreement (BPA). That BPA is based off a schedule. Thus, a BPA call is a product of two IDVs – the
BPA and the schedule. Alternatively, a delivery order is an award off a standalone IDV (e.g. a blanket order agreement
(BOA)). The GWCM table, with additions from the IDV table, captures relationships between an award and all the IDVs
from which it is derived. Appendix D details the relationship between IDVs and award types.
6.2.3 Tier Logic
Business-rule tier logic has been developed to assign SUM tier ratings from the contract inventory and apply them to
various types of FPDS awards. This logic is intended to apply the associated SUM tier for a contract to any of its
dependent contracts such as a BPA based on a multiple award schedule. The tier logic has four components:
1. If there is a related master IDV, what is its SUM tier?
2. If there is a related derivative IDV, what is its SUM tier?
3. If the award does not relate to an IDV, what is the SUM tier of the award type?
4. Compare 1-3 and take the highest SUM tier
The full tier logic can be found in the SUM/BIC Data Sources Appendix.
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6.3 Ensuring Accuracy The GWCM PMO and data team will continue collaborating with categories and agencies to improve and update the
master contract inventory and SUM tier ratings. Routine updates should reflect creation or recognition of new IDVs, and
revisions to SUM tier ratings of existing IDVs particularly, in the case of BIC designations. Should agencies or categories
discover incorrect or mislabeled contracts, the GWCM data team will review and resolve the root causes. New contracts
or contracts that have matured in terms of SUM tier will require review by OMB, to ensure they meet all the necessary
metrics before being added or updated in the contract inventory.
SUM as a key category management metric will help incentivize agencies to move spend from unaligned contracts to
agency-wide and government-wide solutions. Monthly reporting for SUM and BIC will improve the transparency and
provide insights into agency spend and contracting actions. To help support this effort, the GWCM PMO will continue
developing and improving the dashboards and associated tools, to help categories and agencies identify opportunities to
move spend into more mature contract vehicles.
7 Best-in-Class Obligations Against Addressable Market A key mechanism for returning greater value in acquisitions is increasing the usage of government-wide contracts
designated as Best-in-Class. OMB Memo M-17-26 instructs agencies to use existing government-wide vehicles “to the
maximum extent practicable,” specifically identifying GSA Schedules, government-wide acquisition contract (GWACs),
multiple-award contracts, and Best-in-Class contracts. Because they have been thoroughly reviewed according to
rigorous criteria, widespread adoption of BIC solutions will:
Maximize the government’s shared purchasing power, allowing agencies to leverage volume discounts;
Help agencies operate more efficiently, by reducing administrative costs and contract duplication; and,
Expand collection and sharing of government-wide buying data, leading to better informed business decisions.
Full information regarding the Best-In-Class program, criteria, and resources can be found here.
The ‘BIC Obligations Against Addressable Market’ KPI measures the amount of FPDS obligations through solutions
designated as Tier 3/BIC in the contract inventory against BIC addressable obligations (BAO), which can be thought of as
the government market for the PSC and NAICs codes offered on that contract. BIC obligations will be tracked by agency,
total government-wide BIC obligations, and by each individual BIC solution.
7.1 Baselines and Goals BIC obligations were 10% of the addressable market in FY16. The President’s Management Council has prescribed
specific BIC dollar targets for CFO ACT agencies -- totaling $20.3B based on their baseline FY16 addressable market. The
CAP Goal action has set a government-wide target of 35% of addressable obligations to go through BIC solutions in FY18.
7.2 Data Source and Reporting Best-in-Class Obligations Against Addressable Market is based primarily on the SUM framework with the addition of
BAO. For BICs, the SUM framework tracks FPDS obligations through contracts designed as Tier 3/Best in Class in the
contract inventory and related IDV table and tier logic. BAO has been determined by the GWCM data team using the
combination of Product Service Codes (PSC) and North American Identification Codes (NAICs) utilized by an official BIC
vehicle. The addressable market is calculated from historical data and subject matter expertise from the vehicle owners.
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The Best-in-Class Obligations Against Addressable Market KPI will be reported monthly based on FPDS-NG and reported
data via SUM/BIC and Executive Summary Dashboards.
8 Cost Avoidance Cost avoidance is broadly defined as the extent to which a program is delivering increased value for goods and services
they acquire by paying less, using less, or obtaining more for the same cost. Tracking and measuring cost avoidance is
important as it allows agencies to more effectively manage suppliers, users, or program delivery, and serves as the basis
for future analyses into total cost of ownership or asset utilization. The cost-avoidance KPI will be measured with the
transactional data provided by BIC solutions, and will create a framework for measuring costs and outcomes over time.
Although cost avoidance currently is being calculated using different methodologies and baselines, varying by BIC
solution, they all serve the same purpose -- measuring value for goods and services acquired. This KPI will help improve
agencies’ mission effectiveness and service delivery to American taxpayers, by redirecting spend and resources away
from common goods and services and toward delivery of the mission.
8.1 Baselines and Goals The GWCM program has established a $5.8B baseline in historic cost avoidance. This baseline is a combination of cost
avoidance reported via OMB’s original SUM data call, FSSI cost avoidance from 2010-2016, and reported cost avoidance
that was reviewed by the PMO in response to the FY15 SUM data call. Best-in-Class solutions reported an additional
$7.7B in FY17 cost avoidance, bringing the cumulative total to $13.5B.
Source Cost Avoidance
Historic / FSSI Cost Avoidance $2,183,730,037
FY15 SUM Data Call $3,617,675,724
Cost Avoidance Baseline: $5,801,405,761
The CAP Goal Action Plan has set a target of $15B in cumulative cost avoidance through FY18 with additional increases in
subsequent years. Based on the baseline $5.8B cost avoidance detailed above and $7.7B cost avoidance in FY17, the in-
year target for FY18 is $1.5B. These goals are government-wide and agencies will contribute towards reaching these
targets by increasing their utilization of BIC contracts.
8.2 Requirements for Applying Cost-Avoidance Methodologies To report cost avoidance claimed through BIC solutions, cost-avoidance methodologies must:
Be specific to a BIC solution;
Have a documented basis for a cost-avoidance rate;
Have the cost-avoidance rate applied to actual expenditure;
Be evidenced via transactional data provided from known, auditable system(s);
Be reported on a net present-value basis; and
Be calculated in the fiscal year for which it occurs.
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8.2.1 Specific Cost Avoidance
Cost avoidance will be reported directly from the solutions that have achieved BIC designation. The GWCM PMO and
data team will review the solution’s proposed methodology to ensure it meets the requirements outlined above, as well
as provide any guidance to strengthen or refine the methodology. These BIC solutions will have undergone a rigorous
review of their proposed methodology and also will provide detailed transaction-level data to the GWCM PMO, on the
agreed schedule, to provide sound evidence for its cost-avoidance reporting.
8.2.2 Documenting Cost Avoidance
Cost avoidance must be documented with supporting evidence demonstrating how the spend was incurred and
calculated. For example, if a contract vehicle has a cost-avoidance model based on labor-rate cost avoidance, evidence
would demonstrate that this contract’s labor rates were X% lower than the labor rates of comparable contracts or an
agreed baseline. For the comparison to be meaningful, the legacy vehicles used for comparison should account for at
least a preponderance, and preferably a majority, of spend in the functional area in question. Using outlier contracts
with unusually high labor rates overstates the cost-avoidance rates and brings the cost avoidance claims into question;
the goal in establishing the basis of cost avoidance is that it should withstand reviews for traceability and
reasonableness.
8.2.3 Evidence of Cost Avoidance
Solutions being evaluated for BIC designation will be required to provide sample data to ensure they provide the
required fields for calculation of cost avoidance, if performed by the GWCM data team or provides enough detail for the
auditability of reported cost avoidance if calculated by the BIC solution owners themselves. If solutions choose to
calculate and report their cost avoidance to the PMO, the provided methodology must be detailed enough and data
provided to make the reported cost avoidance figures auditable.
If category teams are concerned about the reliability of data being used to report cost avoidance – for example, cost
avoidance is based on FPDS, but it is known that data entry of transactions lags from the actual transaction date, or that
incomplete data entry will understate cost avoidance -- the concern should be documented but not “corrected” via
some sort of arithmetical adjustment. The required methodology documentation and data elements are included in the
BIC capture file with examples provided in the appendix.
8.3 Accepted Types of Cost Avoidance Assessment Methodologies There are a variety of ways to calculate cost avoidance. The most robust method is based on actual prices paid for goods
and services, so it clearly demonstrates how much was saved per unit acquired. The methods listed below are not an
exclusive list; however, an alternative proposal should meet the same general requirements as these methods. The
methods described in this section are presented in order of preference:
Previous Prices Paid
Average Prices Paid
Average Rate of Cost Avoidance
Discounted Contract Rates
External Benchmarking
Administrative Cost Avoidance
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Ideally, cost avoidance will be reported based on prices paid compared to a baseline of previous prices paid for the same
goods or services. However, the GWCM PMO recognizes that the range of vehicles and sub-markets, along with the
maturing nature of supporting tools, will mean that the other methods should be accepted. The GWCM PMO will
intermittently revisit whether less rigorous methods are no longer helping to drive program success and recommend
retirement of those methods to OMB.
8.3.1 Previous Prices Paid
Costs avoided based on previous prices paid demonstrate the clearest possible cost avoidance. The cost avoidance is
calculated by looking at unit prices paid for goods and services before a new contracting vehicle was put in place,
comparing the legacy prices to the new prices, and multiplying the difference by the number of units acquired or
services consumed in each period. For example, if a new contract results in laptops being acquired for $100 less than in a
prior fiscal year, and 200 laptops are acquired, then the cost avoidance achieved would be $20,000. This approach is
better suited to instances when there is a clear cost-per-unit and there is accurately reported data for the number of
units acquired. Two examples are included below:
Baseline Price Unit Price Paid Quantity Total Paid Avoided Costs
Lightweight laptop $1,200 $1,050 25 $26,250 $3,750
Basic laptop $750 $715 30 $21,450 $1,050
Laptop upgrade 1 (memory) $850 $810 45 $36,450 $1,800
Laptop upgrade 2 (memory, processor)
$950 $890 40 $35,600 $2,400
Laptop upgrade 3 (memory, processor, HD)
$1,100 $1,000 35 $35,000 $3,500
High-end laptop $1,250 $1,225 12 $14,700 $300
Total paid and saved $169,450 $12,800
Table 3 Costs avoided based on prices paid
Baseline Price / Hour
Price Paid / Hour
Total Hours Total Paid Avoided Costs
Senior HR manager 110 105 160 $16,800 $800
Senior HR specialist 90 85 2200 $187,000 $11,000
Journeyman HR specialist 75 68 4016 $273,088 $28,112
Junior HR specialist 65 57 2008 $114,456 $16,064
Total paid and saved $591,344 $55,976
Table 4 Notional labor costs avoided based on prices paid
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8.3.2 Average Prices Paid
Cost avoidance can be reported based on the comparison of current year prices paid against average prices paid. This
approach can be used when there is prior-year data for a good or service with normal market variations within the
course of a year, or when there is not available data for each transaction completed. It could also apply when multiple
products and services are acquired together. For example, when hardware and implementation services are combined
with different discounts, an average cost-avoidance figure can be determined to simplify cost-avoidance calculations
over multiple instances. An example for average airline market prices compared to government prices is shown below.
ATL – DCA Market FY16
FY16 average fare paid $212
Q1 average commercial fare $475
Q2 average commercial fare $500
Q3 average commercial fare $400
Q4 average commercial fare $325
FY16 average commercial fare $425
Costs avoided per segment $213
Total trips in FY16 for selected market 17,432
FY16 total costs avoided in market $3.7M Table 5 Average prices paid for airline fares
8.3.3 Average Rate of Cost of Avoidance
Reporting cost avoidance based on average-rate cost avoidance conceptually merges elements of average prices paid
and maximum contract rates. Category teams can generate a sample of representative transactions against vehicle costs
(for example, selecting contracts that reflect the distribution of spend by scope and vendor size within a sub-category)
and then use paid contract rates versus vehicle contract rates to determine an average rate of contract cost avoidance.
This approach allows category teams to capture cost avoidance beyond what would be identified using the maximum
contract rates approach, but carries a small risk of misstating cost avoidance, depending upon how representative the
selected contracts are.
An example of this -- by comparing the labor rates for a vehicle against the equivalent labor rates for blanket purchase
agreements written against the vehicle, reflecting discounting from the vehicle rates by the vendor:
Senior HR Manager
Senior HR Specialist
Journeyman HR Specialist
Junior HR Specialist
MAS Rates $125.00 $105.00 $98.00 $84.00
BPA 1 $113.00 $98.00 $91.00 $73.00
BPA 2 $115.00 $95.00 $86.00 $76.00
BPA 3 $114.00 $100.00 $92.00 $76.00
BPA 4 $119.00 $89.00 $84.00 $79.00
Average BPA LCAT rate $115.25 $95.50 $88.25 $76.00
LCAT cost avoidance % versus MAS
8% 9% 10% 10%
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Overall average % cost avoidance
9%
Table 6 Average contract rate of cost avoidance
Based on this comparison, the cost avoidance rate for spend against this vehicle is 9% - so if the total throughput for
FY17 were $10M, the reported cost avoidance would be $900k.
8.3.4 Discounted Contract Rates
A significant proportion of government spend is through services contracts, which tend to have initial contract rates (for
example, hourly costs by labor category) that are subsequently discounted. If a category’s initiative is undertaken using
contracts that meet strategic needs but do not have specific prices-paid information available, then cost avoidance can
be based on the difference between maximum contract rates between the targeted vehicle and the vehicles that it is
replacing. In the example below, the labor rates from a MAS are compared to the rates from a BPA against the MAS to
claim cost avoidance.
MAS BPA Costs Avoided per Hour
Hours Used Total Costs Avoided
Senior HR manager
$125.00 $119.00 $6.00 2008 $12,048.00
Senior HR specialist
$105.00 $100.00 $5.00 2008 $10,040.00
Journeyman HR specialist
$98.00 $95.00 $3.00 2008 $6,024.00
Junior HR specialist
$84.00 $79.00 $5.00 2008 $10,040.00
Costs avoided $38,152.00
Table 7 Comparison of unadjusted contract-labor rates
The challenge with using unadjusted contract rates is in justifying how realistic both the initial rates and the revised
rates are for the market in question. It’s possible that beginning rates for both MAS and BPA contracts may be inflated,
as suppliers and customers understand there may be additional competition or negotiations that further lowering the
prices. The example above indicates cost avoidance from one vehicle to the next; however, category teams are
encouraged to develop a cost-avoidance calculation that is closer to market pricing.
8.3.5 External Benchmarking
Category teams can propose cost-avoidance rates based on external cost benchmarking. This would require that the
teams identify an external source of data about trends in prices paid for comparable initiatives, based on reported or
sampled costs gathered by a third party. This is more likely to be applicable for commodity goods, where there is limited
variation between government and commercial sector requirements. Using an external benchmarking approach for
services presents additional challenges, given the variations between commercial contracting practices and federal
contract prices. If a category team can demonstrate that the data from external benchmarking is for comparable scope
and methods, then it can be used to calculate cost avoidance. This approach should be developed in close coordination
with the GWCM PMO data team to ensure that the business justification is clearly documented, and that standards for
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calculating cost avoidance, especially those of auditable data, are met. In the example below, it is shown how a program
similar to GSA’s wide-area network (WAN) compares negotiated prices to average commercial prices compiled by
Gartner Research.
Service GSA Price Commercial Price % Costs Avoided Business Volume Costs Avoided
IPS $38 $47 19% $1,500,000 $287,234
Voice Services $12 $19 37% $2,350,000 $865,789
Toll Free Services $23 $32 28% $800,000 $225,000
Managed Network Services $47 $70 33% $720,000 $ 236,571
Total Cost Avoidance: $1,614,595
Table 8 External benchmarking example
8.3.6 Administrative Cost Avoidance
Administrative cost avoidance is generally defined as avoided administrative costs in terms of avoided transaction fees,
reduced overhead, reduced processing times, and lower labor costs associated with utilizing existing government-wide
solutions, as opposed to pursuing open-market procurements. Administrative cost avoidance is particularly useful in
relation to service contracts, where per-unit pricing cannot be easily obtained.
8.4 Cost-Avoidance-Assessment Methodologies Management
8.4.1 Establishing and Managing Cost-Avoidance-Assessment Approaches
Figure 1 Defining and Approving Cost Avoidance Assessment Approaches
PMO Preliminary Definition
• PMO develops guidance using known practices, program goals, etc.
• PMO conducts initial internal reviews to improve proposed methodologies
BIC Solution Input
• BIC solution owners propose cost-avoidance methodologies based on PMO Guidance
• PMO BIC/data team reviews proposed methodology and associated data and provides feedback
OMB Approval
• BIC PMO presents proposed cost-avoidance methodologies prior to final BIC designation
• OMB confirms that methodologies align with desired goals and reporting
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8.4.2 Establishing and Managing Individual Benefit Calculations
The GWCM PMO (BIC and data teams) will review all proposed methodologies for calculating cost avoidance for each
BIC solution. The basis of evaluation will be the guidelines in this document, with particular emphasis on ensuring that
the basis for cost-avoidance rates and calculations is data-driven and repeatable. Cost-avoidance-assessment
methodologies reviewed by the BIC and data teams will be provided a confidence rating based on their baseline
comparison, volume comparison, data availability, baseline update, and incorporation of any outside factors into the
cost avoidance calculation. The full confidence-ranking system can be found in Appendix G.
The GWCM PMO data team will work with BIC solution owners and category teams to address any shortcomings,
recognizing that in the early stages of this program there are limits as to what can be achieved with available systems
and data. Where possible, the GWCM PMO will document a path to address known weaknesses, including dependencies
for making improvements (for example, instituting contract vehicle reporting and ensuring that transaction data is
properly collected and validated). Cost-avoidance-assessment approaches, in addition to those reported via BIC
transactional data such as demand management, will be considered and reviewed on a case-by-case basis.
The GWCM PMO BIC and data teams review cost-avoidance methodologies with BIC solution owners and category
teams during annual performance reviews, to determine if there were any business or data changes that need to be
reflected in the individual cost-avoidance calculations. It is the category teams’ responsibility to identify any changes
such as new contracts, new transaction reporting, changing baselines, etc. This is critical if there is an issue that is
distorting performance reporting.
In addition, the GWCM PMO data team will work with the category teams as needed to address unexpected changes
such as sudden spikes in costs (for example, increases in fuel costs for reasons outside of the control of the Federal
government), as well as to document any new cost-avoidance calculations driven by new inputs and data, retirement of
older calculation methods, etc. The GWCM PMO data team will focus otherwise on issue resolution that impacts the
program, such as irregular transmission or quality issues with prices-paid data, claimed cost avoidance that doesn’t
match accepted calculation approaches, etc.
8.5 Data Input and Reporting Cost avoidance and associated BIC transactional data will be submitted to the BIC team via the Telecommunications
Services Category (TSC) portal. The TSC portal is secure, scalable, provides automated updates for document upload and
allows for a single, secure, centralized on-line cloud-based repository. The BIC team will work with solution owners
during the BIC designation process to develop and assign roles and responsibilities for data uploads and review on
predetermined intervals, usually quarterly. Cost avoidance figures will reported via the Executive Summary and BIC
performance dashboards.
9 Tier 0 Contract Reduction Tier 0 contracts do not align to the SUM contract maturity matrix, or they have not been designated as spend under
management. The Tier 0 contract reduction KPI measures the reduction in Tier 0 definitive contracts, indefinite delivery
vehicles, and purchase orders. Contracts below the micro-purchase threshold will be excluded from the contract count.
Tier 0 contract reduction will be measured as the current Tier 0 contract count in comparison to the same time period
during the baseline year. This KPI is focused on reducing duplicative contracting in areas where solutions may have
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overlapping scope. By reducing Tier 0 contracts, categories should be able to improve efficiencies, reduce unnecessarily
duplicative contracts, encourage aggregation, and realize opportunities to increase SUM and use of BIC solutions.
9.1 Baselines and Goals The FY16 baseline for Tier 0 contract reduction is 425K Tier 0 contracts. There was an overall reduction of 3% for these
contract types in FY17. The President’s Management Agenda has set a more aggressive goal for FY18, targeting a 10%
reduction for Tier 0 contracts government-wide.
9.2 Data Source and Reporting Progress against reduction goals is reported monthly by extracting data from FPDS and comparing the number of unique
Tier 0 contracts signed in the current fiscal year to date to the number of unique Tier 0 contracts for the same period in
the baseline fiscal year, on a category, sub-category, and department basis. The unique Tier 0 contract count in a specific
time period is the aggregate of the unique Tier 0 count of IDV contracts and the unique Tier 0 count of open market
awards:
The unique count of an IDV contract is a single counting within FPDS of the reference piid in a specified time
period. Multiple actions against an IDV such as task orders or BPAs will use the same reference piid and will
therefore not increase the count of unique contracts.
The unique count of an open market contract (definitive contract or purchase order) is a single counting within
FPDS of the award piid in a specified time period. Contract actions such as modifications and/or de-obligations
will use the same award piid and will therefore not increase the count of unique contracts.
Tier 0 purchase orders and definitive contracts generally do not have any information recorded for a referenced
indefinite delivery vehicle (IDV) -- meaning that the contract is not based on any government-wide contracts which
typically have better terms, conditions, controls, and discounting.
This KPI will be reported monthly through the Executive Summary Dashboard, as well as through multiple views on the
GWCM dashboards. To prevent inaccurate contract counts, Tier 0 contract reduction will be reported for the months
where there are complete contract counts to incorporate the Department of Defense’s FPDS reporting lag (90 days). To
facilitate the success of this KPI, the GWCM data team has created a Tier 0 reduction playbook which leverages the
Contract Inventory Exploration, Top 20 Analysis, and Awards Exploration tools to identify opportunities for agencies to
take action to reduce their Tier 0 obligations.
9.2.1 Ensuring Accurate Statistics
Tier 0 contracts are not aligned to Tiers 1-3 in the master contract inventory. As the primary data source for this KPI is
FPDS, correct input of award and IDV information is necessary to produce accurate contract counts. The accuracy of
each data element is important and can impact category, SUM, and other views. Additionally agency, category, and
solution stakeholders should be monitoring the GWCM contract inventory to ensure their contract information is
accurate and up-to-date, to ensure obligations that may be tied to a Tier 2 or Tier 3 solution are not being rated as Tier
0. The GWCM PMO data team has produced a suite of dashboards and tools designed to help stakeholders identify and
action Tier 0 awards.
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9.2.2 Accounting for Market Trends
Declining markets create a potential issue for setting goals. For example, if a category already shows signs of “natural”
decline in spending and has low levels of open-market spend, then emphasis should be focused on better management
of the portfolio of strategic contracts. This drives performance against the KPI while also reflecting the market in
question. Other areas to consider could include using purchase cards when there is little opportunity for consolidation,
specialized supply of mission-critical materials and services where there are reduction limits, etc.
10 Small-Business Utilization The small-business utilization (SBU) KPI measures the percentage of spend awarded to small businesses as prime
contractors on contracts in FPDS. This measure accounts for small-business exclusions in alignment with the Small
Business Administration’s annual goaling reports. SBA’s full exclusion criteria can be found at this link.
Agencies are expected to pursue category management & small business contracting together: The President’s
Management Agenda expects agencies to improve their acquisitions of common goods and services using category
management principles and continue to meet their small business goals.
10.1 Baselines and Goals Within the GWCM scope, FY16 and FY17 had SBU of 31.1% and 30.1%, respectively. The PMA SBU goal is 30% to
maintain or improve upon that level. The GWCM PMO is also committed to setting SBU baselines by category for all
small-business set-asides and developing associated targets, where appropriate.
10.2 Data Source and Reporting SBU will be reported monthly as percentage of the total year to date spend that went to small businesses divided by the
amount of total spend that was deemed eligible by the Small Business Administration to be obligated to a small
business. SBU will be reported from the perspective of the program as a whole, as well as by category.
The calculation is based on FPDS data, as follows:
CO Small BusinessSize Determination =S (Small) AND SBG=Y / All $ also where SBG=Y
o The variable SBG is a GWCM produced variable provided by the PMO data teams application of SBA's
goaling exclusion rules. In practice, stakeholders will need to execute those same goaling rules against
FPDS-NG records or request a copy of the GWCM Data team’s enriched data set to follow the logic being
described.
Small businesses are identified by the value “S” in the Federal Procurement Data System (FPDS) field
vend_contofbussizedeterm (which captures value of “S” for small businesses, or “O” for “Other than small
businesses”)
Transaction date is based on the FPDS field signeddate (which captures the date upon which the action was
signed by the contracting officer, this is used to align the transaction to the fiscal year in which it happened)
The summed obligations are based on the FPDS field obligatedamount (this field captures a dollar amount for
the obligation for the transaction)
Monthly reporting data will be obtained by taking a standard data extract of FPDS data and applying a standard set of
filters and calculations from Tableau to correctly align data to the correct period and categories, as well as reported at
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the program level. It is understood that monthly reporting small-business participation results can result in significant
fluctuation from month to month, and also that the final target may not be met until almost the end of the fiscal year or
when final year end data has been submitted into FPDS. The GWCM PMO data team will monitor theses fluctuations to
determine if the frequency of the report is negatively impacting category and program reporting, and propose changes if
that would provide a business benefit to the program.
11 Category Management Training Program success for category management ultimately depends on individual acquisition professionals planning and
executing acquisitions consistent with category strategies and guidance. To better facilitate this, the GWCM PMO has
developed a series of "workforce education events" including online and face-to-face courses, demos, panels, and live
events designed to help Federal employees with government-buying responsibilities implement category management
principles. These events focus on key category management aspects: What category management is and why the
government is instituting it, efforts to drive broader adoption of Best-in-Class solutions, and tactical tools that
acquisition professionals can share, learn from, and use in their day-to-day work.
For an event to qualify toward this KPI, it must meet three requirements: live presentation (synchronous), announced
through the Federal Acquisition Institute (FAI) or Defense Acquisition University (DAU), and be “well-received” as
indicated by the participant evaluation data. “Well-received” is defined as an average rating of 4.2 or higher on the
standard five-point Federal Acquisition Institute Training Application System (FAITAS) post-course survey.
11.1 Baselines and Goals As FY18 is the first year for GWCM training as a formal KPI for the category management program, there is no baseline
for comparison on previous year’s performance. OMB has set a goal for 776 individuals trained for the year. This target
was developed by reviewing the planned GWCM training sessions and the associated number of individuals signed up to
attend. As the goal was set on preliminary scheduled sessions and attendance, it may be revised by OMB.
11.2 Data Source and Reporting The quantitative measure for this KPI is the total number of individuals trained on category management principles
through the FAI that meet the agreed minimum standard. The training KPI will be reported for both number of courses
and individuals trained, and the data for training will be pulled from attendance records and course survey results. This
number of participants trained will be compiled every month for the previous month’s training events and reported via
the Category Management Executive Summary Dashboard.
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Appendix A: Document Change Control Tracking This section records the status of changes made to the KPI Control Document. During the draft stage, major versions will
be tracked here until the document is approved. Once the document has entered approved status, the preceding work
will be removed and updates to the approved version (1.0) will be tracked until it is superseded by a new approved
version (2.0), etc.
Version Date Change Description Author
2.0 DRAFT v1.8 April 12, 2018 Initial Draft for PMO review Michael Orta
2.0 DRAFT v1.9 April 19, 2018 Incorporating changes from ESD feedback as well as updates from PMO team
Rachel Gillerlain, Kristen Wilson, Issa Abboud, David Shields, Kelly Seacrist, Michael Orta
2.0 DRAFT v2.0 April 27, 2018 Incorporate feedback from OMB-Expand agency/BIC roles and responsibilities, rework introduction and scope sections
Michael Orta, Issa Abboud, David Shields
2.0 DRAFT v2.1 May 1, 2018 Formatting and grammatical issues. Confirmation of data sources.
Michael Orta,
2.0 DRAFT v2.2 May 8th PMO review Kelly Seacrist
2.0 DRAFT v2.3 May 25, 2018 Incorporated feedback from PMO
Issa Abboud
2.0 DRAFT v2.4 May 30, 2018 Removed highlighted text and prepared for review and approval by the CMLC
Issa Abboud
2.0 DRAFT v2.5 June 6, 2018 Added Roles and Responsibilities for SAOs from category team input
Michael Orta
2.0 DRAFT v2.6 June 11, 2018 Incorporated feedback from DHS, Treasury, and NASA (updated language, fixed appendix formatting, clarification on how KPIs are tracked)
Michael Orta
2.0 DRAFT v2.7 June 15, 2018 Added footnote to CAP chart in section 1
Issa Abboud
2.0 DRAFT v2.8 June 27, 2018 Incorporated feedback from DOE
Issa Abboud
2.0 Publication July 13, 2018 Publish 2.0 KPI Guidance Michael Orta
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Appendix B: Executive Approval of Versions This section records executive approval of major version iterations of the KPI Control document.
Approval Stage Role Signee Date
Category Concurrence Categories July 03, 2018
OMB Approval OMB Meredith Romley July 03, 2018
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Appendix C: Data Sources This appendix identifies the data sources used for KPI reporting.
Source KPI Supported Use of Source for KPI
FPDS-NG
Small Business Utilization Identify vendors classified as small businesses
Identify vendors classified as other than small businesses
Identify obligations by order (e.g. Delivery/Task orders) and contract for small and other than small businesses, for a given period of time
BIC Obligations Against Addressable Market
Track obligations for contract vehicles aligned to Tier 3/BIC in Contract Inventory
SUM Track obligations for contract vehicles aligned to Tiers 1 and 2
Tier 0 Contract Reduction Identify Tier 0 unique contracts (contracts with no Reference IDV)
Identify contracts with a reference IDV
Obtain count of unique and non-unique contracts, for a given period of time
Contract Inventory
SUM Aggregate obligations by maturity tier, category, and sub-category
Additional updates from agencies through their contract inventory
BIC Obligations Against Addressable Market
Aggregate BIC obligations by category, and sub-category
Update for newly designated BICs
Addressability Matrix BIC Obligations Against Addressable Market
Define the addressable market for BICs based upon PSC/NAICs codes
IDV Table
BIC Obligations Against Addressable Market
Capture relationships and hierarchies between IDVs and awards
SUM Capture relationships and hierarchies between BICs and their child contracts
BIC Transactional Data
Cost Avoidance Total transaction spend for reported cost avoidance, not used to track award information
Baselines used for the calculation of cost avoidance against prices paid
FAI/LMS Registration System
GWCM Training Identify user agencies
Track number of individuals trained
Track number of total trainings events performed Appendix Table 11-1: Data sources
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Appendix D: SUM/BIC Data Sources
Master Contract Inventory The image below provides a detailed example of the design and fields in the Master Contract Inventory.
Appendix Table 11-2: Master contract inventory fields
IDV Table
IDV Award-Type Relationships
Master IDV Type Derivative IDV Type Award Type Description FSS BPA BPA CALL BPA - BPA CALL BOA - DELIVERY ORDER IDC - DELIVERY ORDER FSS - DELIVERY ORDER GWAC - DELIVERY ORDER - - DEFINITIVE CONTRACT - - PURCHASE ORDER
Appendix Table 11-3: IDV Award-type relationships
Relationship between IDV and Award Tables
Appendix Table 11-4: IDV and Awards
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Tier Logic
Appendix Table 11-5: FPDS Tier Logic
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Appendix E: Travel Cost Avoidance Calculations - ERRC This appendix provides a sample of the format used to document cost-avoidance methodologies, using the Employee
Relocation Resource Center (ERRC) as an example. This appendix is a living document which will be updated to reflect
improvements in gathering, maintaining, and calculating cost avoidance.
Travel Cost Avoidance Assessment Example Contract Basics
Name Employee Relocation Resource Center Homesale Assistance Services SCHEDULE 48 TRANSPORTATION, DELIVERY AND RELOCATION SOLUTIONS SINs 653 - 1/5
Agency Owner General Services Administration
Component Owner (if applicable)
Federal Acquisition Service Office of Travel, Employee Relocation, and Transportation
Contract / Program Scope Schedule 48 Homesale Assistance Services is designed to assist Federal agencies to relocate key personnel quickly and to minimize the financial impact to employees that result from an expedited move. Federal agencies offer homesale assistance to approximately 15% of relocating Federal employees annually. The assistance is used predominantly by the law enforcement and intelligence communities, medical and scientific agencies, and agencies with employees in extremely remote areas. Agencies offer Homesale Assistance to ensure that relocating home-owning employees will not have to bear the expenses of homes in their origin locations for an extended period after moving to their new duty stations.
Through Schedule 48 Homesale Assistance, GSA’s Employee Relocation Resource Center (ERRC) has embedded proven industry best practices into requirements and leveraged the volume of more than 80% of Federal civilian transferees’ homesale transactions to obtain competitive pricing and high-quality service that result in widely recognized value for the government. ERRC offers subject matter expertise to coalesce and inform a highly engaged government relocation community of interest that continually seeks to assure compliance and improve service and pricing.
Contract / Program Start Date
There is no start/end date for the Multiple Award Schedule (MAS), Schedule 48, per se. Approved Multiple Award Schedule, Schedule 48 vendor contract periods are typically 5 years with start and end dates that vary by vendor. Most agencies procure GSA Schedule 48 employee relocation services via Blanket Purchase Agreements that allow for a one-year base term and four one-year option periods. Schedule 48 Employee Relocation Special Item Numbers 653-1 and 653-5 are refreshed twice annually at six-month intervals.
Contract / Program End Date
See above
Contract Ceiling
Category Travel
Sub-categories Employee Relocation - Homesale
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Cost Avoidance Overview
Cost Avoidance Measure Cost avoidance will begin to be reported in FY18. FY16 baseline cost avoidance = $22,246,740
Description of Cost Avoidance Measure
Prices-paid comparison against catalog ceiling pricing, which is negotiated on a per-vendor basis as part of the MAS contract award process. Based on each vendor’s Commercial Sales Practice (CAP) pricing for services specific to each SIN. For Homesale Assistance, service-fee pricing is expressed as a percentage of the value of the home.
Calculation of Cost Avoidance
Formula: Cost Avoidance** = (Vendor Catalog Price - Actual Price Paid by Vendor Agency Customers) X Average Home Value X Number of Transactions
Step 1: Create subsets of the vendor report database for each Homesale SIN, transaction type and pricing option.
There are two Homesale SINs: SIN 653-1 for regular transactions and SIN 653-5 for properties anticipated to require special services outside the scope of 653-1 (hard to sell due to extremely remote location, extended marketing period, etc.).
There are three transaction types: Buyer Value Option (BVO), Amended Sale, and Appraised Value Sale.
There are four pricing options: Full Choice with Mortgage Pay-Off, Full Choice with Mortgage Servicing, Managed Buyout with Mortgage Pay-Off, Managed Buyout with Mortgage Servicing. Each vendor has been approved for distinct catalog ceiling prices for each SIN, transaction type and pricing option.
There are 13 vendors approved for Homesale Assistance. Total number of possible subsets = 2 SINs x 3 Transaction Types x 4 Pricing Options x 13 Approved vendors = 312 potential subsets Step 2: For each subset, Calculate Difference Between Catalog Ceiling Pricing and Actual Price Invoiced (SIN Pricing Option by Transaction Type by Vendor) = Subset Average Cost Avoidance Percentage Step 3: Multiply the Subset Average Cost Avoidance Percentage by Subset Average Home Value = Average Costs Avoided per Transaction
Subset Average Home Value is calculated by aggregating the Home Values sold in each subset, and dividing by the quantity of Homes Sold within that subset
Step 4: Multiply Average Costs Avoided per Transaction by Number of Transactions in each subset = Average Costs Avoided for all Transactions within a Subset Step 5: Sum Average Costs Avoided for all Subsets = Total Homesale Assistance Costs Avoided
**Calculated by vendor by Agency for each SIN and pricing option and aggregated
Cost Avoidance Rate (if applicable)
N/a
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Cost Avoidance Calculation Details
Data Elements Used for Cost Avoidance Calculation
Homesale Prices Paid (transaction-level data reported by Vendors via FSS19)
Vendor Catalog Ceiling Price (Ceiling Prices by type of transaction and Pricing Option )
Average Home Value (transaction-level data reported by Vendors via FSS19)
Transaction Type
Transaction Count (aggregated from transaction-level data reported by Vendors via FSS19)
Vendor Name
Agency Name
SIN
Homesale Pricing Option
Business Rules and Assumptions
The more that we teach our agency customers to purchase smarter, the less revenue we will bring in, due to lower fees charged to our agency customers upon which our IFF is based.
Manual / Automated Calculation(s)
Cost avoidance is manually calculated by a FAS program analyst in an Excel file.
Frequency of Reporting Cost avoidance will be reported quarterly starting in FY18.
Cost Avoidance Assessment Data Source(s)
Data Source for Cost Avoidance Assessment
Prices Paid, Homesale Transaction Counts and Average Home Value: Vendor-reported data into GSA’s FSS19 system and reported vendor prices-paid reports (quarterly): GSA’s Multiple Award Schedule master contract requires vendors to report schedule contract sales to GSA quarterly.
ERRC implemented detailed transaction-level reporting requirements in 2010.
Catalog Ceiling Pricing: Required by Schedule 48 at the master-contract level, reviewed by GSA contracting personnel during offer reviews and contract renewals, and audited by contract personnel is the basis for schedule catalog price negotiations. Reported annually at contracting personnel’s discretion.
Data Storage The data comes in from the suppliers in pre-formatted Excel spreadsheets. The data is then combined with other suppliers and every column is checked for errors or outliers.
Data Transformation / Manipulation
Cost avoidance is manually calculated by a FAS program analyst in an Excel file.
Availability of Data
Data is maintained internally by the FAS Employee Relocation - Homesale team
Cost avoidance will be reported quarterly starting in FY18
Cost Avoidance Baselines
Baseline Comparison - Spend
Catalog ceiling price
Baseline Comparison - Volume
Because the fee is a percentage of home value, increased transaction volume will not result in an increased cost-avoidance percentage.
Frequency of Baseline Annual
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Updates
Tracking Baseline Drivers (e.g. market)
The baseline rates are updated when the catalog prices are updated and reported by contracting.
Price Paid Catalog Price
Average Homesale Value
Total Transactions
Total Cost Avoidance
VENDOR A
AGENCY 1 23.50% 34.95% $406,038 26 $1,208,775
AGENCY 2 23.60% 34.95% $414,664 29 $1,364,867
VENDOR A Total Cost Avoidance
$2,573,642 (653-1 Option 1 Only)
Contact Information
Point(s) of contact Julie Blanford
Data point(s) of contact Reid Salvette
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Appendix F: BIC Data Elements
Required Data FPDS Solution Data Element / Short
Name Definition / Description Notes / Comments
Award vehicle Data source name in English for filtering with the Acquisition Gateway, the IDIQ, GWAC, MAS or contract vehicle
Contract number (IDVPIID)
Base contract number, if applicable, e.g. Multiple Award Schedule, GWAC or BPA
If there are a significant number of contracts that comprise the solution (e.g. more than 10), contract numbers can be provided in a separate Excel file; please note the name of the file in the response.
Contract number (Award PIID)
Base contract number, if applicable, definitive contract from an agency
If there are a significant number of contracts that comprise the solution (e.g. more than 10), contract numbers can be provided in a separate Excel file; please note the name of the file in the response.
Order number (Award PIID)
Requisition, order or BPA call number On transactional basis, i.e., prices paid, should have combination of IDV and Order Award PIID or only Award PIID, not trying to capture base IDV awards
DUNS Data Universal Number System (DUNS) number of the prime contractor, i.e., the unique identifier for the business entity holding the government contract referenced by the PIID
Can also be derived from order number (FPDS data)
Department (funding Agency)
Department/Agency funding the purchase Can also be derived from order number (FPDS data)
Order date/date of award
Date order was awarded, i.e., the contract or order signed date
Can also be derived from order number (FPDS data)
Quantity of item sold Total number of units (e.g., 1, 10, 100 etc.) Required unless only summary-level data is available and PMO has approved an exception
Contract price per unit
Cost/price per each single unit of measure as identified on the base contract (may be the ceiling price)
Required unless only summary-level data is available and PMO has approved an exception
Award price per unit Awarded Price per unit (may equal the contract price)
Required unless only summary-level data is available and PMO has approved an exception
Unit of measure Represents how the quantity of item sold is counted (e.g., each, lot, hour, year, pound, etc.)
Required unless only summary-level data is available and PMO has approved an exception
Total price The award price per unit multiplied by the quantity of item sold, i.e., the total extended
Required unless only summary-level data is available and PMO has approved an exception
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price
Description of Deliverable
Description of item or service purchased
Frequency of Update Data can be provided by the third week of the month for the month prior. For quarterly reporting, data can be provided three weeks after the end of the quarter.
Required Data Non-FPDS Data Element / Short
Name Definition / Description Notes / Comments
Solution name Data source name in English for filtering with the Acquisition Gateway, the IDIQ, GWAC, MAS or contract vehicle
DUNS Data Universal Number System (DUNS) number of the prime contractor, i.e., the unique identifier for the business entity holding the government contract referenced by the PIID
Department (funding Agency)
Department/Agency funding the purchase
Order date/Date of award
Date order was awarded, i.e., the contract or order signed date
Quantity of items sold
Total number of units (e.g., 1, 10, 100 etc.) Required unless only summary-level data is available and PMO has approved an exception
Contract price per unit
Cost/price per each single unit of measure as identified on the base contract (may be the ceiling price)
Required unless only summary-level data is available and PMO has approved an exception
Award price per unit Awarded price per unit (may equal the contract price)
Required unless only summary-level data is available and PMO has approved an exception
Unit of measure Represents how the quantity of item sold is counted (e.g., each, lot, hour, year, pound, etc.)
Required unless only summary-level data is available and PMO has approved an exception
Total price The award price per unit multiplied by the quantity of item sold, i.e., the total extended price
Required unless only summary-level data is available and PMO has approved an exception
Description of deliverable
Description of item or service purchased
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Frequency of update Data can be provided by the third week of the month for the month prior. For quarterly reporting, data can be provided three weeks after the end of the quarter.
BIC Prices-Paid Data Fields Award Vehicle
Contract Number / IDV_PIID (If Applicable)
Contract Number / Award PIID
Order Number
Funding Department
Description of Deliverable
Unit of Measure
Contract Price per Unit
Award Price per Unit
Quantity of Item Sold
Total Price
DUNS
Award Date
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Appendix G: Cost-Avoidance-Confidence Matrix In addition to assessing the methods and data for calculating cost avoidance, the GWCM PMO will apply a confidence
ranking for five criteria outlined below. For each criterion, the contract/program is given a compliance rating as follows:
Low: 1, Medium: 2, High: 3, and No data: 0. The ratings are summed to provide a range of confidence: Low: 0 – 5;
Medium: 6 – 10; and High: 11 – 15
Not applicable or No Rating (0)
Low (1) Medium (2) High (3)
Baseline - Volume No data is available Baseline volume for
comparison is "unit of one"
with no allowance for
equivalent volume
Baseline pricing reflects
discounting for lower volumes
than program purchased
Baseline is to comparable /
equivalent volumes
Baseline - Comparator
No data is available Baseline cost comparison is to
a non-representative or non-
market price. For example, the
comparison is to a GSA
schedule price or to a
generally available list price.
Baseline cost comparison is to
comparable but composite
pricing (e.g. periodic average
or basket of goods / services)
Baseline cost comparison is to
equivalent previous prices
paid (e.g. comparing cost of
laptops of similar specification
on a per-laptop basis)
Baseline - Timeliness
No data is available
Baseline is more than 24
months old.
Baseline is 13 - 24 months old Baseline is no more than 12
months old
Availability of Evidence to Support Cost-Avoidance Calculation and Volume Uptake
No data is available. Partial data available Supporting data is available
but not verifiable (e.g. FPDS)
Data available and verifiable
(e.g. publically available data,
commercial databases, trend
analysis), ideally transactional
level data
Tracking Price Drivers
No data is available No adjustment for price
changes (inflation, deflation,
commercial lists prices)
Infrequent adjustments for
price changes (no more than
once every 24 months)
Frequent adjustments that
accurately reflect the market
place (12 - 24 month cycle)
Appendix Table 11-6: CA Confidence Assessment Matrix
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Appendix H: SUM Maturity Matrix
Attributes Tier 1 Agency-wide Mandatory Solutions
Tier 2 Multi-Agency Solutions & Agency-wide Best-in-Class Solutions
Tier 3 Government-wide Best-in-Class Solutions
Leadership: Do individuals and organizations have clear category management responsibilities?
Designated Agency category lead with
specific category expertise and day-to-
day management and oversight
responsibility (i.e. program manager for
IT software contract; this is not agency
CIO).
Clear understanding of category
manager, category lead, commodity
team roles.
Designated Agency category lead; and
Active participation in increasing usage of
Agency BIC vehicles and government-wide
BIC vehicles
Designated full-time government-wide
category manager (appointed by OMB);
and
Government-wide Category Management
Council staffed by senior-level Agency staff
(endorsed by category manager); and
Active category teams; and
Government-wide PMO support.
Strategy: Are category management practices in place?
Existing agency-wide solutions are being
used, per mandatory use or
consideration policies; and
Policies are implemented and adopted
that drive behavior changes (e.g., double
sided printing).
Meets one of three criteria:
Government-wide solutions in use, per
mandatory use or consideration policies
in place; and/or
Implements government-wide policies
that drive behavior changes; and/or
Agency-wide mandatory-use BIC meets
all of Tier 2 and Tier 3 requirements, but
not available government-wide.
CMLC approved category management
strategy that endorses a limited number of
“Best-in-Class” solutions in accordance
with CMLC approved criteria and guidance;
and
CM strategy developed to increase
adoption of BICs and Tier 2 government-
wide solutions.
Data: Is analysis conducted and shared?
Conducted and documented high-level
analysis for establishing a baseline
assessment, including:
• Total spend (how much is spend on the
service and / or commodity);
• Vendors (what is the pool of vendors
meeting this requirements);
• Market dynamics (for example, trends
in pricing, requirements, typical
configurations or skill sets, etc.);
• Small-business participation (how do
they match performance targets and
goals).
A shares relevant contract terms,
condition, saving methodologies, and
prices data across government when
requested by the category manager,
preferably via the Acquisition Gateway1,
within 90 days.
In addition to meeting Tier 1 criteria, agency
collects data on contract administration
performance and benchmarks other
internal/external processes:
• Pricing (either previous pricing, discounts,
or a similar metric as laid out in KPI Guidance
Document
• Agency use (at least the dollars obligated
via the contract, and units acquired if
possible)
• Solution performance (for example,
reduced delivery times, consistently lower
pricing, meeting or achieving delivery dates,
etc.)
Agency collects customer feedback data:
• Vendor performance (timely delivery,
quality of contract administration, etc.)
• Offerings (does the vendor make an effort
to propose improvements for future efforts,
keep technology fresh, etc.,)
• Value (does the vendor offer market
competitive pricing, how does pricing align to
delivery results, etc.)
• Appropriate data that supports reported
cost avoidance
• Customer support.
In addition to Tier 1 and 2 criteria, fully meets
requirements of Best-in-Class criteria,
guidance and reporting, including:
• Commodity management analysis: pricing,
supply chain analysis, market information,
agency use, solution performance, validated
cost avoidance, demand management
strategies, other activities to drive better
acquisition.
• Vendors analysis: prices-paid data collected
in a way that supports comparative analytics
(i.e., normalizes for quantity or delivery term
variances); feedback on modification time,
terms and condition issues, and customer
service.
• Customer analysis: customer profiles to
understand what is being purchased, from
whom, when and why; and customer/user
feedback on vendor performance, offerings,
value, and customer support; and
• Analysis spend (outstanding vs. actual).
Undertakes spend analysis comparing
contract utilization against addressable spend
• Providing mandatory data fields as per BIC
guidance document.
1 https://hallways.cap.gsa.gov/
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Attributes Tier 1 Agency-wide Mandatory Solutions
Tier 2 Multi-Agency Solutions & Agency-wide Best-in-Class Solutions
Tier 3 Government-wide Best-in-Class Solutions
Tools: Are tools in place to share information and reduce duplication?
Tools (e.g., DHS Connect, DoD FedMall,
GSAdvantage!) are in place and shared to
capture and share information on the
category, such as contract vehicles,
availability, terms/conditions, pricing, etc.
Works with category manager to populate
the Acquisition Gateway with requested
information on the solution and best
practices.
Acquisition Gateway includes only solutions
(acquisition vehicles and/or policies) that are
endorsed by government-wide category
manager as “Best-in-Class”
Metrics: Are metrics defined, tracked, and publicized?
Metrics are in place, including at a
minimum, spend, cost avoidance and
small-business participation;
Agency has a documented methodology
for tracking these metrics (internal or at
servicing agency).
In addition to meeting Tier 1 criteria:
Agency tracks metrics quarterly on contract duplication reduction, adoption (dollars and percent of addressable spend), cost avoidance, small business participation, and appropriate efficiency metrics for demand management solutions.
Fully meets requirements of Best-in-Class
criteria, guidance and reporting, including
tracks and publishes on the Acquisition
Gateway metrics quarterly on spend,
adoption (dollars and percent of addressable
spend), duplication reduction, cost avoidance
and small-business participation.
Appendix Table 11-7: SUM maturity matrix